E85 Gas Prices

When I see E85 gas prices at gas stations, it is way cheaper than regular gas. Why?

Ethanol, an alcohol biofuel produced mostly by fermenting corn, is used in a variety of blends. As E85 (85 percent ethanol, 15 percent gasoline), it is available largely in the Midwest and the estimated 9 million “flex-fuel” vehicles already on the road from Ford, Chrysler and General Motors can use it. As E10, ethanol is commonly blended into regular gasoline. That’s done to reduce both carbon monoxide and greenhouse gas emissions — it burns cleaner than petroleum gasoline.

It’s true that E85 gas prices have generally been cheaper than regular unleaded gasoline. For example, in early March, the national average for E85 was $3.21; the national average for regular gas was $3.72, according to E85 Prices. In the Midwest, E85 generally costs 30 cents less per gallon than gasoline. One reason for this has to do with politics. Corn farmers have long been subsidized to produce ethanol with a 45-cents-per-gallon tax credit. As USA Today reported, when Congress voted against renewing the ethanol subsidy in June 2011, this raised gasoline prices more than 4 cents a gallon because of the fuel’s E10 content.

According to Ron Lamberty, a senior vice president at the American Coalition for Ethanol, supply and demand play a big part in E85’s relatively low price.

“We have more ethanol than we can use because we can’t put more than 10 percent in gasoline yet,” he says, adding that domestic oversupply led to significant amounts of ethanol exports in the latter months of 2011. Approval of E15 will lead to a 50 percent domestic demand increase. Currently there are only 2,500 public E85 fuel stations, compared with more than 120,000 gas stations.

The rapid proliferation of ethanol production facilities also has caused spikes in the demand for, and thus the price of, corn, which can lead to so-called “food versus fuel” issues. Learn more about this subject from the Earth Policy Institute.

— Jim Motavalli, author of High Voltage: The Fast Track to Plug In the Auto Industry

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Share your thoughts.

kyle adams

5/19/2012 5:22:08 AM

I'm not sure where you got "it takes 12 units of energy to make that 1 unit of ethanol," but it's just wrong. Even with corn ethanol, you'll get 1.5-1.6 units of energy out. Back up your facts next time. http://www.theindependent.com/unl-study-ethanol-energy-efficiency-growing/article_3105d9c5-9806-5bb7-83f9-3eac22e3fceb.html

j.russell bailey

4/14/2012 7:56:45 PM

This article isn't as badly propagandistic as many of late on ME, and thankfully so! Nice change of pace! The FACTS of ethanol are in: there is a 12 to 1 ratio of burning energy to make energy; ie, to produce 1 unit of ethanol it takes 12 units of energy to make that 1 unit of ethanol. This is NOT 'economical' nor is it anywhere near 'energy neutral' in terms of production, but the radical tree huggers made the loudest noises about ethanol and the farmers wanted easy money...so here we are doing the OPPOSITE of what we should be doing: conserving energy logically, factually, and empirically! I'd also like to point out that the phrase 'food vs fuel issues' doesn't begin to cover what that area entails: American families are being paupered because of Ethanol Subsidies and people are getting TIRED of it!!! Wake up and smell the cordite!

fred duerr

4/14/2012 5:40:02 PM

Your are absolutely correct, Shawn. It would use about 1.4 times as much E85 gasohol as it would take regular gasoline to drive the same distance. People also forget that electricity is not free. It takes the consumption of fuel (coal, oil, etc.) by the electric generators to make most of our electricity. If a person really was concerned about energy costs, perhaps driving an old car is a good choice. Think of the savings in energy by not smelting metal, forming petroleum- based plastics, manufacturing, and delivering new autos to customers. Oh! I forgot! Think of all the people that would put out of work, and companies that would go out of business.

stephen rhudy

4/14/2012 1:47:12 PM

Carl, not every farmer can grow switch grass or grain on his farm............................I have to tell you, I was 'green' before it was a term anyone used. But in a 'scary' way.I'm still a believer in Nuclear Power, always was, always will be.Yeah, yeah , yeah, FUKASHIMA!!!! THREE MILE ISLAND!!!! UUUHHHHH!!!!..................But what about the lack of planning at Fukashima? Nukes, in Japan, 100yds from the OCEAN, doesn't seem like good engineering to this old power generation type....................And the TMI problem was because of bad plant practices and poor emergency procedures. There are hundreds of nukes around the world operating daily with NO problems. Our own Navy has run millions of hours without a casualty......................Ethanol and NatGas are great fuels, but for clean air, no outside control of our energy sources, and long term stability, we need OIL now and NUKES long term!................Nukes BTW, that need to be run by the Navy to IMHO.

carl vasiliou

4/13/2012 8:20:20 PM

They can also make it from wild grasses that grow across our country. Grow these and we can have cheaper fuel and not cause higher food prices. We could probably help keep some farmers from loosing thier farms. Everybody wins except the groups lobbying to keep fuel prices higher. I guess someone with influence would loose his nitch, and we can not have that. Our country is in trouble when common sense looses out to the rich who want to keep their riches! We could improve the fuel economy if we did not have big government regulating us into the ground!!!!!

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